ISA recommends public IT procurement changes

4 Jul 2007

The Irish Software Association (ISA) has called for regulatory changes to enable small to medium-sized enterprises (SMEs) to compete effectively for public contracts.

The ISA outlined recommendations to the Government’s national public policy procurement unit on SME participation in public acquisitions.

The public sector in Ireland comprises over 200 agencies and in 2004, the last year for which figures are available, the Government spent €260m on technology products and services.

Despite Irish software companies having a proven track record globally, the ISA claimed that the Irish Government overlooked indigenous SMEs in favour of large, established companies which are seen as a safer bet.

“Often the public procurement processes militate against innovation and promotes conservative approaches that favour established suppliers or in-house builds,” said ISA chairman Pat Brazel. “While there has been limited success for Irish software companies in the local public sector market, difficult challenges remain when trying to access other parts of the public sector.

We are lucky to have a transparent public procurement system, Brazel said, but he also claimed that relatively minor changes would greatly enhance the ability of smaller companies to compete on a level playing field. “The stimulation of a local, responsive and innovative market would benefit the public sector, local job creation and ultimately the tax payer.”

The ISA recommendations include: less prescriptive tenders, where instead of prescribing the solution required, the procurement body could ask potential suppliers to propose innovative solutions, addressing a particular issue or to deliver particular benefits; dividing contracts into smaller lots as far as possible (unbundling), which would encourage more indigenous SMEs to tender for public sector contracts; supporting subcontracting and consortium tenders through setting out selection criteria which allows subcontracting in large-scale projects; amending the financial capacity criteria; and minimising the cost and administrative burden of entering into a tender process.

Brazel said: “Successful participation by Irish SMEs in local public tenders is a key way to secure gilt-edged reference customers, allowing them to expand into new markets.”

He stated the ISA would welcome a further opportunity to work with the Government in a forum around these issues, which would create better understanding of the Government’s IT requirements and the software industry’s demonstration of their capabilities.

By Niall Byrne